In Southeast Asia, the deafening sound of road construction work reflects the fierce competition among China, Japan and South Korea for lucrative infrastructure projects. But in stores and shopping malls, the sound of Alipay transactions indicates China’s even-greater ambition to establish its home-grown mobile financial services abroad.

Ant Financial Services Group, a spin-off from the Alibaba Group that runs the e-wallet and online payment service Alipay, is pushing into the markets of the northern member states of the Association of Southeast Asian Nations (ASEAN) even faster than China invests in basic infrastructure there.

At King Power, Bangkok’s largest duty free store some 15 kilometers from the Thai capital’s Suvarnabhumi Airport, a group of free-spending Chinese tourists is going on a shopping spree right before hopping on a plane home.

At the cash register, the women pull out their mobile phones instead of wads of paper bills in the Thai baht local currency. With deft movements that reveal habitual use, they open the Alipay app and swipe it over QR codes to pay for their purchases.

When we enter a 7-Eleven convenience store near the Phrom Phong Skytrain station, hoping to buy a pack of popular caramel candy, the Thai clerk explains, “Don’t bother looking for it, it’s all been bought up by Alipay users.”. A sticker with the Alipay logo adorns the cabinet next to him.

“Chinese tourists travel to Thailand, Malaysia, Singapore, Vietnam and Laos. They frequently travel abroad, and their consumption is on the rise. They bring smartphone payment systems with them overseas,“ notes Zhang Dayong, head of the Southeast Asia Region at Ant Financial.

How big is the crowd that uses their smartphones as digital wallets?

Chinese Tourists Build an RMB Zone

Thailand reported 8.77 million visits by Chinese tourists in 2016. The Thai government had originally expected the annual number of Chinese visitor arrivals to top 10 million, but the death of King Bhumibol Adulyadej last October put a damper on tourism. Nonetheless, China has already become the biggest source of tourists for Thailand.

As ambitious infrastructure projects with dominant Chinese involvement such as the high-speed railway between Bangkok and Nakhon Ratchasima Province have yet to be completed, Alipay, China’s leading mobile payment service, works on realizing the Chinese dream of an internationalized Chinese currency, the renminbi (RMB).

Thanks to the smartphone transactions of more than one million Chinese tourists, Thailand, a large consumer market within the Mekong River Delta region, has already become part of the “RMB economic sphere.” In the next step, Alipay wants to continue its expansion in neighboring Laos and Myanmar.

“The payment system is a very important part of infrastructure. What we do is take our technology abroad and helps the destination countries to establish mobile payments,” remarks Zhang.

Tai Wan-ping, professor at the Department of International Business of Cheng Shiu University in Kaohsiung, frequently visits Southeast Asia for academic exchanges. He believes that Alipay could make the concept of an Asian regional currency obsolete. “The new economy means that development is leapfrogging. Who knows? Alipay might become the Asian dollar of the future,” posits Tai.

Thailand First Choice for Expansion

Alipay began its global foray in 2015, making Thailand its first stop due to the country’s proximity and its large number of visitors from China.

“The shop owners are all very willing [to use Alipay] because they can send their own marketing information into the customer’s hand through Alipay in an efficient way,” explains Ant Financial Thailand country manager Sodprasert Pipavin.

Su, who hails from Thailand, worked in the banking industry in Beijing from 2007 to 2014, witnessing China’s mobile internet revolution and the emergence of Chinese-style payment tools first-hand. Having gotten used to using Alipay in China, she is now pushing Alipay’s expansion in her home country.

“This year we want to popularize [Alipay] with small shop owners and street stall vendors,” says Su in fluent Mandarin.

Acquiring Local Players to Conquer New Markets

The Alibaba Group and Ant Financial are not just targeting Chinese tourists traveling in Southeast Asia; they have their sights set much higher, aiming to tap the wallets of local ASEAN consumers.

With a population of 650 million consumption-oriented people, ASEAN constitutes a big financial transaction pie. All it will take for Alipay to succeed is to replicate within the ASEAN region the lifestyle and consumer habits that emerged in China over the last decade, and a fast and cost-effective means to that goal is through acquisition.

Last year, Alibaba bought a stake in Lazada, the largest e-commerce platform in Southeast Asia. In late June this year, Alibaba announced that it had increased its stake in the online retailer from 51 percent to 83 percent, bringing its total investment to US$2 billion. In the future, Lazada will continue to operate independently under its own brand name, but payments in the six core ASEAN members, including Thailand, began to be transferred to the Alipay platform from this January.

Aside from the Lazada acquisition, Alipay is also partnering with local business groups to speed up its expansion into ASEAN. Last November, Ant Financial formed a strategic partnership with Thailand’s Ascend Money, which operates the True Money electronic wallet service. Since Ant Financial became involved, the number of True Money users has soared from 200,000 to 700,000 accounts.

The previous undersupply in mobile financial services can be attributed to technology gaps that Alipay can fill, says Alipay’s Zhang. “This is due to the technology gap in the Southeast Asian markets; it also amounts to an export of technological capability that China has accumulated over the past decade,” Zhang says.

The Alipay logo is bound to become ubiquitous in Thailand, be it at department store counters, street stalls or in convenience stores as Alipay transactions become part of people’s everyday lives in ASEAN.